economics

Topics: Dependency theory, Economics, Communism Pages: 5 (1406 words) Published: December 14, 2013

DEPENDENCY THEORY: - Economic development theorists over the last few centuries have developed models for explaining the “undeveloped-ness” of countries in the third world countries. From Durkheim to the International Monetary Fund (IMF), we have, time after time, come to witness the rise and fall of development theories and their explanations for the predicament that many poor countries face. Dependency theory has (more so than others) lasted a great deal of time in the framework of the international sphere in terms of presenting a model in which development and “underdevelopment” can be assessed. To understand dependency theory, it is necessary to understand the meaning of dependency. Therefore to this end, Dependency can be defined as an explanation of the economic development of a state in terms of the external influences--political, economic, and cultural--on national development policies (The Journal of Development Studies, Vol. 6, no. 1, October 1969, p. 23). There are three common features to these definitions which most dependency theorists share. First, dependency characterizes the international system as comprised of two sets of states, variously described as dominant/dependent, center/periphery or metropolitan/satellite. The dominant states are the advanced industrial nations in the Organization of Economic Cooperation and Development (OECD). The dependent states are those states of Latin America, Asia, and Africa which have low per capita GNPs and which rely heavily on the export of a single commodity for foreign exchange earnings.

Secondly, both definitions have in common the assumption that external forces are of singular importance to the economic activities within the dependent states. These external forces include multinational corporations, international commodity markets, and foreign assistance. Most dependency theorists regard international capitalism as the motive force behind dependency relationships. Andre Gunder Frank, one of the earliest dependency theorists, is quite clear on this he points out that;

...historical research demonstrates that contemporary underdevelopment is in large part the historical product of past and continuing economic and other relations between the satellite underdeveloped and the now developed metropolitan countries. Furthermore, these relations are an essential part of the capitalist system on a world scale as a whole.

According to this view, the capitalist system has enforced a rigid international division of labor which is responsible for the underdevelopment of many areas of the world. Dependency theory, develops by looking at historical trends to explain the current state of developing nations, and is premised on the neo-Marxist ideology that the process of world capitalist integration under the control of monopoly capital is to blame for the economic backwardness of third world nations.

This critical evaluation of historical international trade trends gave dependency theory the support it needed, and it shows some resemblance of what dependence means in this type of economic system. It provides added credence to the notion that states were not “undeveloped” because of their perceived economic “backwardness” or inability (even unwillingness) to modernize, but instead because of the way they are forced to interact within the world capitalist structure. Dependency is not a socioeconomic relation that just occurs; it is developed historically through capitalism’s power relations between the first world and the third world. It is a situation in which a certain group of countries have their economy conditioned by the development and expansion of another economy, to which the former is subject in all cases. The basic situation of dependence leads to a global situation in dependent countries that situates them in backwardness and under the exploitation of the dominant countries. Colonialism is always a clear route to making the colonized state dependent on the...

References: Namkoong, Y (1999). Dependency Theory: Concepts, Classifications, and Criticisms
the international Area Studies.

Gunder Frank, Andre. “Economic Dependence, Class Structure, and Underdevelopment Policy,”
James D., et al (1972). Dependence and Underdevelopment Latin America’s Political Economy. Garden City:
http://www.academia.edu/2271357/Understanding_Dependency_Theory_A_Comparative_Evaluation_of_Gun (1999):
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